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Bajaj Finserv Ltd.

BSE: 532978 Sector: Financials
NSE: BAJAJFINSV ISIN Code: INE918I01018
BSE 00:00 | 01 Apr 4499.30 -90.45
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NSE 00:00 | 01 Apr 4501.90 -89.30
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OPEN 4550.00
PREVIOUS CLOSE 4589.75
VOLUME 25358
52-Week high 10297.00
52-Week low 4160.60
P/E 204.24
Mkt Cap.(Rs cr) 71,602
Buy Price 4490.00
Buy Qty 2.00
Sell Price 4499.30
Sell Qty 2.00
OPEN 4550.00
CLOSE 4589.75
VOLUME 25358
52-Week high 10297.00
52-Week low 4160.60
P/E 204.24
Mkt Cap.(Rs cr) 71,602
Buy Price 4490.00
Buy Qty 2.00
Sell Price 4499.30
Sell Qty 2.00

Bajaj Finserv Ltd. (BAJAJFINSV) - Auditors Report

Company auditors report

To the Members of Bajaj Finserv Ltd.

Report on the audit of the standalone Ind AS financial statements Opinion

We have audited the accompanying standalone Ind AS financial statements of BajajFinserv Ltd. ('the Company') which comprise the Balance Sheet as at 31 March 2019 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ('the Act') in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at 31 March 2019 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the 'Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended 31 March 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

We have fulfilled the responsibilities described in the Auditor's responsibilities forthe audit of the standalone Ind AS financial statements section of our report includingin relation to these matters. Accordingly our audit included the performance ofprocedures designed to respond to our assessment of the risks of material misstatement ofthe standalone Ind AS financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying standalone Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
(a) Transition to Ind AS accounting framework (as described in note 2B of the standalone Ind AS financial statements)
The Company has adopted Ind AS from 1 April 2018 with an effective date of 1 April 2017 for such transition. For periods up to and including the year ended 31 March 2018 the Company had prepared and presented its financial statements in accordance with the erstwhile generally accepted accounting principles in India (Indian GAAP). In order to give effect of the transition to Ind AS these financial statements for the year ended 31 March 2019 together with the comparative financial information for the previous year ended 31 March 2018 and the transition date Balance Sheet as at 1 April 2017 have been prepared under Ind AS.

The transition has involved significant change in the Company's policies and processes for financial reporting including generation of supportable information and exercise of estimates to inter alia determine impact of Ind AS on accounting and disclosure requirements.

In view of the complexity involved Ind AS transition and the preparation of financial statements subsequent to the transition have been areas of key focus in our audit.

• Read the Ind AS impact assessment performed by the management and the resultant changes made to the accounting policies in light of the requirements of the new framework.

• Evaluated the exemptions and exceptions allowed by Ind AS and applied by the Management in applying the first-time adoption principles of Ind AS 101 in respect of fair valuation of assets and liabilities existing as at transition date.

• Tested the accounting adjustments posted as at the transition date and in respect of the previous year to convert the financial information reported under erstwhile Indian GAAP to Ind AS.

• Tested the disclosures prescribed under Ind AS.

 

Other information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of management and those charged with governance for the standalone IndAS financial statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's responsibilities for the audit of the standalone ind as financial statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements for the financial year ended 31 March 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of section 143 of the Act wegive in the 'Annexure 1' a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in'Annexure 2' to this report;

(g) In our opinion the managerial remuneration for the year ended 31 March 2019 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 27 to the standaloneInd AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For S R B C & CO LLP

ICAI Firm registration number: 324982E/E300003 Chartered Accountants

per Arvind Sethi Partner

Membership Number: 89802 Pune: 16 May 2019

Annexure 1 to Independent Auditors' Report

Annexure 1 referred to in paragraph 1 under the heading 'Report on other legal andregulatory requirements' of our report of even date

Re: Bajaj Finserv Ltd. (the 'Company')

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the Management during the year and nomaterial discrepancies were identified on such verification.

(c) According to the information and explanations given by the Management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

2. The Company's business does not involve inventories and accordingly therequirements under clause 3(ii) of the Order are not applicable to the Company and hencenot commented upon.

3. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189

of the Act. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of the Orderare not applicable to the Company and hence not commented upon.

4. In our opinion and according to the information and explanations given to us thereare no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Act are applicable and hence not commented upon.

5. The Company has not accepted any deposits within the meaning of sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Act related to generation of power through wind turbines and are of theopinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

7. (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund

income-tax service tax goods and service tax duty of custom value added tax cessand other statutory dues applicable to it. The provisions relating to employees' stateinsurance and duty of excise are not applicable to the Company.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income-tax service tax goods and service tax dutyof custom value added tax cess and other statutory dues were outstanding at the yearend for a period of more than six months from the date they became payable.

The provisions relating to employees' state insurance and duty of excise are notapplicable to the Company.

(c) According to the information and explanations given to us the dues outstanding ofincome tax sales-tax service tax customs duty excise duty value added tax and cesswhich have not been deposited on account of any dispute are as follows:

(रIn Crore)

Name of the statute

Nature of dues

Period to which the Amount amount relates

Forum where the dispute is pending

Income tax Act 1961

Income Tax

26.92 FY 2008-09 and FY 2010-11

Income Tax Appellate Tribunal

Income tax Act 1961

Income Tax

18.55 FY 2011-12 FY 2012-13 and FY 2015-16

Commissioner of Income Tax (Appeals)

Maharashtra Value Added Tax Act 2002

Value Added Tax Act

0.32 FY 2009-10

Joint Commissioner of Sales Tax (Appeals)

 

8. The Company did not have any outstanding loans or borrowing dues in respect of afinancial institution or bank or to government or dues to debenture holders during theyear.

9. According to the information and explanations given by the Management the Companyhas not raised any money by way of initial public offer/further public offer/debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

10. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the Management we report that no fraud by the Company or on the Company by theofficers and employees of the Company has been noticed or reported during the year.

11. According to the information and explanations given by the Management themanagerial remuneration has been paid/provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Act.

12. In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

13. According to the information and explanations given by the Management transactionswith the related parties are in compliance with section 177 and 188 of the Act whereapplicable and the details have been disclosed in the notes to the financial statementsas required by the applicable accounting standards.

14. According to the information and explanations given to us and on an overallexamination of the Balance Sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and hence not commented upon.

15. According to the information and explanations given by the Management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Act.

16. According to the information and explanations given by the Management the Companywas registered as a Non-deposit accepting Non-Banking Financial Company until thefinancial year 2014-15. During the year 2015-16 vide order dated

23 October 2015 the Company was recognised as a Core Investment Company (CIC) by theReserve Bank of India (RBI) and is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly the provisions of the clause 3(xvi) ofthe Order are not applicable to the Company.

For S R B C & CO LLP

ICAI Firm registration number: 324982E/E300003

Chartered Accountants

per Arvind Sethi

Partner

Membership Number: 89802

Pune: 16 May 2019

Annexure 2 to Independent Auditors' Report

Annexure 2 referred to in paragraph 2 (f) under the heading 'Report on other legal andregulatory requirements' of our report of even date

Report on the Internal Financial Controls under clause (i) of sub-section 3 of section143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of BajajFinserv Ltd. ('the Company') as of 31 March 2019 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

Management's responsibility for internal financial controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the 'Guidance Note') andthe Standards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting withreference to these standalone Ind AS financial statements was established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting with reference to these standalone Ind AS financial statements.

Meaning of internal financial controls over financial reporting with reference to thesefinancial statements

A company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone Ind AS financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent limitations of internal financial controls over financial reporting withreference to these Standalone Ind AS financial statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone Ind AS financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements and such internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements were operating effectively as at 31 March2019 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For S R B C & CO LLP

ICAI Firm registration number: 324982E/E300003 Chartered Accountants

per Arvind Sethi Partner

Membership Number: 89802 Pune: 16 May 2019